Oct ninth 2021
VOLVOS SPORT delicate reminders of their Swedish heritage, from tiny blue-and-yellow flags adorning some fashions to the “hammer of Thor” headlights that present illumination for all its automobiles. A model coupling Scandi-cool design with concern for security and the atmosphere has in recent times helped Volvo broaden its footprint past its European heartland to China and America. It hopes to maintain going. An preliminary public providing (IPO), introduced on October 4th will make it each “more Swedish and more global”, says Hakan Samuelsson, Volvo’s boss.
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At the Swedish finish, itemizing in Stockholm will reinforce Volvo’s Norse identification. Globally, the IPO is an opportunity to attract on a extra various pool of traders because it broadens its worldwide attain, whereas remaining small and nimble sufficient to navigate the fast-changing automotive enterprise. And Mr Samuelsson stresses that not a lot would change in its relationship with Geely, the Chinese agency that has owned Volvo since buying it from Ford in 2010 for $1.8bn. Geely intends to stay the most important shareholder and the 2 companies will proceed to share prices and know-how.
When Geely deserted an IPO of Volvo in 2018, the ostensible motive was a looming commerce conflict between China and the West. In actuality, the choice in all probability had extra to do with nobody else pondering the agency was value $30bn. That valuation now appears to be like extra affordable. Volvo has gone from struggling losses below Ford, and turning out 374,000 automobiles within the final 12 months of American possession, to creating 773,000 within the 12 months to June at a wholesome revenue. Its intention of constructing 1.2m automobiles a 12 months by 2025 appears to be like attainable. It can be main the best way in promoting its automobiles on subscription or on to customers at a hard and fast value, slightly than by way of dealerships.
More essential, Volvo is forward of most rivals in sating the rising urge for food for electrical automobiles (EVs) amongst motorists and traders alike. It has pledged to go all electrical by 2030, lengthy earlier than most rivals; spun off its internal-combustion-engine enterprise right into a stand-alone operation so as to give attention to EVs; and joined forces with Northvolt, a Swedish battery agency, to construct a gigafactory and guarantee provide. It additionally half-owns Polestar, a pure-EV marque that final month introduced plans to go public subsequent 12 months in a reverse merger with a special-purpose acquisition firm (and hopes to fetch a valuation of $20bn). Leaning on Volvo for manufacturing capability and retail and repair networks places Polestar in a greater place than most rival EV startups, which lack both.
Geely will pocket a useful revenue after a decade or so of proudly owning Volvo outright. The Chinese agency will retain a dominant stake however the flotation will even let it think about its reorganisation from a holding firm proudly owning varied carmakers right into a transport-technology group which additionally makes the smartphones and satellites that allow the availability of transport companies and, finally, autonomous automobiles. Volvo, for its half, expects to boost almost $3bn within the IPO, money Mr Samuelsson says the carmaker wants whether it is to maintain up its electrical momentum. If it does, rivals may have much more catching as much as do. ■
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This article appeared within the Business part of the print version below the headline “Electric blue and yellow”